President-elect Obama has called for the creation of more "wind farms." Before jumping on that bandwagon, however, we ought to take a look at West Texas where wind farmers are farming subsidies almost as well as their agricultural cousins and, as a result, they are paying distributors to take their power. Mike Giberson has the story:
In the first half of 2008, [electricity] prices were below zero nearly 20 percent
of the time…During these negative price periods, suppliers are paying ERCOT to take their power….the negative prices appear to be the result of the large installed capacity of wind generation.
Wind generators face very small costs of shutting down and starting
back up, but they do face another cost when shutting down: loss of the
Production Tax Credit and state Renewable Energy Credit revenue which
depend upon generator output. It is economically rational for wind
power producers to operate as long as the subsidy exceeds their
operating costs plus the negative price they have to pay the market. Even
if the market value of the power is zero or negative, the subsidies
encourage wind power producers to keep churning the megawatts out….You could, as a correspondent put it to me, build a giant toaster in West Texas and be paid by generators to operate it.
If President-Obama is serious about green energy it’s not wind he needs to look at but nuclear. Nuclear is clean and green and we can build power stations where we need power, instead of having to invest in costly and inefficient transport networks.